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Organic Consumers Association

U.S. rice dives as GMO issue stirs export fears

CHICAGO, Aug 22 (Reuters) - Rice prices on Tuesday tumbled 5 percent to the lowest level in nearly two months, amid fears that exports could suffer after the discovery of U.S. rice supplies tainted with unapproved genetically modified rice.

Japan has already banned imports of U.S. long grain rice after U.S. government officials announced on Friday that GMO rice was found in commercial supplies.

Europe, a major market for U.S. rice, was set to block unauthorized biotech rice from reaching its shores even as American farmers harvest this year's crop.

"The saga continues, and it's still the psychological fear element that is driving the market," said Neauman Coleman, analyst and rice broker from Brinkley, Arkansas.

Rice futures at the Chicago Board of Trade fell by the daily trading limit of 50 cents per hundredweight, or more than 5 percent, the sharpest one-day decline in years.

Tuesday's drop came on top of declines chalked up on Monday, the first dayside trading session after news of the commingling was announced late on Friday by the U.S. Agriculture Department.

U.S. officials said it was the first time unmarketed genetically modified rice has been found in rice used in the commercial market.

The Food and Drug Administration and USDA were notified on July 31 that testing by Bayer CropScience, a division of Bayer AG (BAYG.DE: Quote, Profile, Research), reported the biotech sample, called LLRICE 601, in rice bins in Arkansas and Missouri.

There were no plans to recall or destroy the commercial rice that was contaminated with the unapproved variety.

CBOT traders were most concerned that the European Union, a big buyer of long grain rice as traded at the exchange, will stop importing U.S. long grain rice following Japan's move.

The 25-nation European Union bloc imported 300,000 tonnes of U.S. rice last year, with 85 percent being long grain. No GMO rice is authorized for import or sale in the EU.

CBOT rice futures for November delivery fell the 50-cent trading limit before closing 49 cents lower at $9.35 per hundredweight -- its lowest close since June 29.

CBOT September futures closed 50 cents lower.

Since the USDA's announcement late Friday, the price of CBOT November rice has fallen 75 cents.

"There are going to be trade tensions. That is basically your knee-jerk reaction," said grain analyst Shawn McCambridge with Prudential Financial.

"Where it goes from here really depends on the political environment within the importing countries, and whether or not this whole GMO issue is as big as they think it is," McCambridge added.

The Food and Drug Administration and USDA were notified on July 31 that testing by Bayer CropScience, a division of Bayer AG (BAYG.DE: Quote, Profile, Research), reported the biotech sample, called LLRICE 601, in rice bins in Arkansas and Missouri.

There were no plans to recall or destroy the commercial rice that was contaminated with the unapproved variety.

CBOT traders were most concerned that the European Union, a big buyer of long grain rice as traded at the exchange, will stop importing U.S. long grain rice following Japan's move.

The 25-nation European Union bloc imported 300,000 tonnes of U.S. rice last year, with 85 percent being long grain. No GMO rice is authorized for import or sale in the EU.

US rushes test for GMO rice amid skittish market By Carey Gillam REUTERS, August 22 2006 http://www.sciam.com/article.cfm?chanID=sa001&articleID=1134AC57B5B1D38B7D70 C1B6FEAA28CF  

KANSAS CITY, Missouri (Reuters) - U.S. government scientists are rushing to certify a test that would identify an unapproved genetically modified rice that has slipped into commercial supplies, an inspection official said on Tuesday.

Work is being done quickly in an effort to ease fears of U.S. rice customers who don't want the experimental strain mixed into their supplies.

"We're very close. Very shortly we should be able to provide the marketplace with the analysis they need," Grain Inspection, Packers & Stockyards Administration Deputy Administrator David Shipman said in an interview.

Shipman said a valid test could be ready for the market within a few days, possibly as early as Wednesday, the day the European Union is expected to launch measures to ensure that the unauthorized rice, known as LLRICE 601, does not enter consumer markets there.

The 25-country European Union is a large importer of U.S. long grain rice, buying about 300,000 tonnes of U.S. rice last year, with 85 percent of that long grain rice. No genetically modified (GMO) rice is authorized for import or sale within the EU.

"There are countries that are interested in knowing whether rice being shipped to them contains this 601," said Shipman. "Having this methodology will allow an exporter to ... verify for the buyer it doesn't contain, or does contain, that particular event."

In terms of the time frame for making such a test available, Shipman said: "We're looking at days and maybe not even plural."

GIPSA began working with Bayer CropScience, a unit of Bayer AG, about two weeks ago after U.S. agriculture and food safety authorities learned on July 31 that Bayer's unapproved, experimental GMO rice had been found in rice bins in Arkansas and Missouri.

Bayer supplied GIPSA with reference material and methodology it uses to distinguish the 601 strain and GIPSA's goal is to validate the company's specific testing methods for commercial use, said Shipman.

Bayer spokesman Greg Coffey had no comment on the status of GIPSA's work. But he said Bayer was also "supporting several commercial laboratories in setting up a testing method for industry use if requested."

The 601 contamination marks the first time that unmarketed genetically unauthorized biotech rice had been detected in long-grain samples targeted for commercial use. And Bayer has not disclosed specifically how it became aware of the contamination.

Japan, for which the United States is the largest rice exporter, has already suspended imports of U.S. long-grain rice.

Rice futures slid to a two-week low on the Chicago Board of Trade on Tuesday on concerns about the U.S.'s rice export business.

U.S. authorities say the GMO strain poses no risk to public health or the environment. But anti-biotech activists say this is but the latest in a long list of examples of flawed government oversight of potentially harmful transgendered crops.

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